{"text":[[{"start":4.84,"text":"When chief executives and business leaders journey to Liverpool for Labour’s annual conference this month, they can be sure of at least one warm welcome. Steve Rotheram, the northern city’s metro mayor and a close friend and ally of Andy Burnham, prime minister, is seeking £11bn of private investment for its continued regeneration."}],[{"start":26.24,"text":"The gathering of Britain’s governing party, which begins on Sunday, will take place in a conference centre next to the River Mersey. The city’s ambitious plans for the revival of its historic docklands include a 70-storey tower with a luxury hotel and apartments. They echo Burnham’s strategy as mayor of Greater Manchester to bring growth to neglected towns and cities with business backing."}],[{"start":49.28,"text":"But Liverpool also symbolises a Labour Party with far less sympathy for capitalism. In the mid-1980s, it was controlled by the hard-left Militant Tendency faction, which halted the city with strikes. Neil Kinnock, Labour’s former leader, dramatically denounced its tactics at the party conference in 1985, and it took a long struggle to haul the party back from socialist purity to electability under Tony Blair’s New Labour."}],[{"start":76.54,"text":"So it raised disturbing memories when Burnham used his first speech as leader in July after ousting Sir Keir Starmer to promise a return to the past. He criticised “four decades of the neoliberalism that began in the 1980s” for taking the UK in the wrong economic direction. The speech was rich in nostalgia for the period before both Margaret Thatcher and Blair, although Burnham served as a junior minister in the latter’s government."}],[{"start":103.86,"text":"Burnham’s speech was partly a people-pleaser’s tactical nod to his leftwing base. But it alarmed business leaders, who fear that Labour’s attitude to private enterprise is ambiguous at best. Starmer took office in 2024 courting the corporate elite with promises of investment and relief from bureaucracy. But his chancellor Rachel Reeves scotched their hopes with a £25bn annual increase in employer national insurance in her first Budget."}],[{"start":null,"text":"

"}],[{"start":131.56,"text":"Now, they hope for easier treatment from Burnham, who has emphasised his “pro-business” stance in Greater Manchester. His core message of devolving power from London has corporate support, and Labour has a long tradition of moderating in office. But the fiscal pressure on Reeves’ successor John Healey will make it hard to offer companies relief from their tax burden."}],[{"start":151.44,"text":"Healey has said he wants the UK to be “a country of wealth creation”, but many are sceptical: “They all want to promise growth and they’re not the people who create it,” says one entrepreneur. Andy Haldane, president of the British Chambers of Commerce and an FT contributing editor, noted last week that markets suspect this of being “a traditional tax-and-spend socialist government with better TikTok videos”."}],[{"start":173.68,"text":"Labour itself has become less enmeshed in business since the mid-1980s, when its party base was rooted in the working-class industrial sector. About 60 per cent of trade union members now work in the public sector, and many Labour MPs have come from charities, think-tanks and public sector bodies, rather than the private sector. Although Healey hopes to reduce the burden of business regulation by 25 per cent by the end of parliament, there are no plans to reverse extensive new employment rights for workers."}],[{"start":null,"text":""}],[{"start":203.12,"text":"Despite this, the mood among some business leaders heading to Liverpool is cautiously positive. Regardless of Burnham’s early rhetoric, they regard him and Healey as more interested in economic growth than progressive ideology. “We have a prime minister with political nous and charisma who could get things done . . . Our message has been ‘We can help you,’” says Rick Haythornthwaite, chair of NatWest Group and the business-led 2030 Prosperity Alliance."}],[{"start":228.64,"text":"Rain Newton-Smith, director-general of the CBI business group, says that Burnham is “clearly bringing” a similar approach to national government as he did to the Manchester region. “He is pragmatic and wants to roll up his sleeves and turn problems into shared challenges.” Another leader contrasts Burnham’s tone approvingly with attitudes to big business of recent Labour and Conservative governments. “The vibes are encouraging. They now need to be turned into actions.”"}],[{"start":254.12,"text":"Chief executives tend to be optimistic until proved wrong, but those close to Burnham suggest they are not deluded. “Andy is far more likely to quote from a homeless person he’s met than a political theorist he’s read. He’s a man of lived experience,” says Danny Sriskandarajah, chief executive of the New Economics Foundation, a progressive think-tank that has been influential on Labour policy. The prime minister wants “a more interventionist state”, he says, “but not an anti-business one”."}],[{"start":284.04,"text":"Burnham is not the first Labour leader whose radicalism is hard to assess. Inspired by socialism, the party’s 1918 manifesto promised the “immediate nationalisation and democratic control of vital public services” but its commitment to common ownership of the means of production became diluted from the 1950s onwards before finally being rewritten under Blair."}],[{"start":307.04,"text":"“I don’t see Labour as ever having been primarily an ideological party,” says Mark Wickham-Jones, a political science professor at Bristol University. But Burnham’s mention in his first speech as leader of the movement being “forged” in steel and iron works, coalfields, mills and shipyards fitted with the party’s nostalgic nature. “Labour is extraordinarily attached to its past,” notes Wickham-Jones."}],[{"start":null,"text":""}],[{"start":331.48,"text":"Having paid tribute to that history, Burnham has since become harder to pin down. He indicated during the by-election in Makerfield in which he was re-elected as an MP that he backed public ownership of privatised industries such as water. He has since moderated his stance, talking only of “public control”. After being a Blair minister, he moved to what is broadly characterised as the party’s “soft left” wing."}],[{"start":355.36,"text":"He defines his programme as “Manchesterism”. As mayor of the city region, he adapted a strategy pioneered by Sir Howard Bernstein, former chief executive of the city council. Investment in transport and infrastructure was used to lure private investment. Greater Manchester’s economy is estimated to have grown by 3.1 per cent a year in the decade leading up to 2023, double the national average."}],[{"start":377.76,"text":"Many of the city’s new jobs are in financial and business services, rather than in the old industries that he eulogised but “Andy believes in whatever works and makes him feel good”, says one adviser."}],[{"start":null,"text":""}],[{"start":390.28,"text":"Like Starmer, he has an overarching faith in public intervention to boost private sector investment. But there are significant differences. Labour’s 2024 manifesto emphasised its national “missions”, notably the drive by Ed Miliband, former energy secretary, to turn the UK into a “clean energy superpower”."}],[{"start":410.46,"text":"Burnham, however, is more focused on restoring local economies by devolving power and control of public investment from Whitehall to metropolitan regions. Harry Quilter-Pinner, executive director of the IPPR think-tank, says the prime minister has “a theory of the state and power that most politicians don’t”."}],[{"start":430.08,"text":"Yet private and public aims can conflict, as with the UK’s pivot from North Sea oil and gas to renewables. Despite hopes for a smooth “green new deal” transition, a target for Scotland to have 28,000 offshore wind jobs by 2020 was missed by 80 per cent, according to the Resolution Foundation. Burnham wants fewer “job-deleting metropolitan projects”, one adviser says. He appointed Miliband as foreign secretary rather than chancellor, as some on the party’s left wanted."}],[{"start":460,"text":"One lingering symbolic question is whether the government will approve more drilling for North Sea gas and oil in the Jackdaw and Rosebank fields, despite opposition from environmentalists. The projects would bring a combined £11bn in investment and Jackdaw would reduce the UK’s reliance on gas from Norwegian fields. Unions criticised long delays in approving the projects and Michael Marra, the newly elected leader of Scottish Labour, backs both."}],[{"start":null,"text":""}],[{"start":487.28,"text":"The larger problem facing many businesses, particularly those in the manufacturing industries close to Burnham’s heart, is that the UK’s industrial energy prices are about a third higher than the European average. This has accelerated the deindustrialisation that he laments in ceramics, chemicals and energy-intensive sectors. Although oil prices have been raised by the Gulf war, businesses also face high levies to pay for the energy transition."}],[{"start":512.88,"text":"“We have the highest industrial electricity costs in the world and that is a choice of government, not markets. We love his narrative about re-industrialisation but you need to fix the cost base,” says Stephen Phipson, chief executive of Make UK, the manufacturing trade group. Reeves provided some targeted relief for energy-intensive industries, but the CBI said it still leaves some 2.7mn British companies facing higher bills."}],[{"start":538.32,"text":"Electricity prices are part of “a tsunami of costs facing businesses”, says Shevaun Haviland, director-general of the British Chambers of Commerce. It says official policies have added 70 per cent to the costs of the average small and medium-sized business in the past decade, including increases under Starmer in employer NI and the statutory National Living Wage. The latter has risen by 11 per cent for adults in two years, above general average wage growth, and by much more for young workers."}],[{"start":null,"text":""}],[{"start":567.22,"text":"A second challenge is the expansion of business regulation. Reeves and Healey have accepted that excessive regulation can limit economic growth. Healey has blamed this on “a thicket of arm’s length bodies and regulators” and set his target for cutting it back by 25 per cent. But others such as Angela Rayner, Labour’s former deputy leader whom Burnham has reappointed to his cabinet, back new union-backed restrictions, notably in the new Employment Rights Act."}],[{"start":594.28,"text":"The act makes it easier for unions to be recognised in workplaces and gives workers on zero- and low-hours contracts rights to guaranteed hours. It became law last year despite business opposition and the government is consulting employers and unions on its detailed implementation. Burnham has given no indication that he will retreat. “We are not asking for a bonfire of rules, but we want it to be proportionate,” Newton-Smith says."}],[{"start":619.2,"text":"Apart from the details, the way this is being implemented by the government with input from employers and unions echoes “tripartism” under governments in the 1970s. The principle of the three sides “sitting together round the same table”, as the Tory prime minister Edward Heath put it in 1972, was dismantled by Margaret Thatcher in the 1980s. That was the start of the “neoliberalism” that Burnham decries."}],[{"start":642.88,"text":"Whatever the hopes of business leaders for the new government, it will be extremely constrained, politically and fiscally."}],[{"start":648.72,"text":"Cutting regulation aggressively would sit oddly with a prime minister who blames UK society’s ills on liberalisation. Meanwhile, it would be expensive to offer broad relief on business costs. It would cost the Treasury about £5bn a year to shift energy policy levies to general taxation, although the CBI argues that it would raise growth."}],[{"start":670.88,"text":"Healey could yet be forced by the fiscal squeeze to impose further tax increases that affect business and investment. Jamie Dimon, chief executive of JPMorgan, has warned against a putative windfall tax on banks, saying that it would affect inward investment. Some ministers back the idea of pushing capital gains tax closer to levels of income tax, arguing that wealth has been undertaxed. Reeves made some increases in capital gains taxes in her first Budget."}],[{"start":null,"text":""}],[{"start":699.52,"text":"A further rise in capital gains tax would affect family businesses and employee share schemes, as well as carried interest income of UK-based private equity partners. “Our members are 100 per cent against it,” says Haviland of the BCC. Burnham has blamed private equity-backed chains for having raised the cost of care for the elderly and hopes to create a public alternative, like the National Health Service. “He hates a lot of what private equity stands for,” one adviser says."}],[{"start":727.82,"text":"The prospect of higher taxes sends shivers through the City of London. “I hope we’ve learnt that some things that work politically do not work economically . . . A lot of investors say that they like the UK and want to invest here but the government makes it damn hard,” says one financier. These fears have had an effect. Chris Rokos, the hedge fund billionaire and one of the country’s largest taxpayers, is moving residency to Greece."}],[{"start":753.14,"text":"It does not help that neither Haldane nor Lord Jim O’Neill, former Goldman Sachs chief economist, have joined the administration, despite having advised Burnham before he became prime minister. Varun Chandra, former managing partner of the consultancy Hakluyt, has remained in Downing Street as chief business adviser and Jonathan Reynolds has returned as business secretary. Company leaders respect them both, but now depend heavily on Healey’s restraint."}],[{"start":780.26,"text":"Even next month’s Budget may not provide clarity on the prime minister’s attitude to business and government. That must wait until the publication of a white paper on devolution, setting out the implications and how much power will be given to mayors. But a trip to Liverpool to see the changing city will offer some clues. If Burnhamism exists anywhere apart from Manchester, it is on this waterfront, from his football team Everton’s new stadium to its development plans."}],[{"start":807.72,"text":"Here is a hopeful vision of a new economy replacing one that foundered, along with Britain’s northern industrial might. “The government must look at what the world will want in 10 years and work from there. You cannot look back,” says Newton-Smith. Despite Labour’s habit of doing so and the nostalgia of its leader’s first speech, that is good advice."}],[{"start":827.54,"text":"Data visualisation by Ray Douglas"}],[{"start":832.4,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790332023_7036.mp3"}